GOLD Elliott Wave Technical Analysis – 31st July, 2013

Last week’s analysis expected upwards movement for the week from gold. Price moved sideways before a sharp spike lower. Price has now turned back upwards.

Click on the charts below to enlarge.

This daily chart focuses on the new downwards trend of primary wave C.

Within primary wave C intermediate waves (1) through to (3) are complete.

Intermediate wave (4) may last about three to six weeks, depending upon what structure it takes. Intermediate wave (2) lasted three weeks and was a deep 66% zigzag. Intermediate wave (4) so far has lasted almost three weeks and I would expect it is incomplete.

Intermediate wave (4) may end at either the 0.236 or 0.382 Fibonacci ratios. When there is more structure within this fourth wave to analyse then a target for it to end may be calculated.

Intermediate wave (4) may find resistance at the upper edge of the parallel channel drawn here using Elliott’s first technique. Draw the first trend line from the lows of intermediate waves (1) to (3), then place a parallel copy upon the extreme within intermediate wave (3).

Within intermediate wave (4) movement should be very choppy and overlapping. At this stage it looks like it may be unfolding as a zigzag or a double with the first structure a zigzag, because so far minor wave A subdivides as a completed five wave impulse. Within the zigzag minor wave B may not move beyond the start of minor wave A. This wave count is invalidated in the short term with movement below 1,180.40.

At 1,151 primary wave C would reach 1.618 the length of primary wave A. This target is a long term target. When we know where intermediate wave (4) has ended within primary wave C then we may use a second wave degree to also calculate this target, so it may widen to a zone or may change.

Within intermediate wave (4) minor wave B was not over and continued further as a more time consuming zigzag with a triangle in the middle of minute wave b. There is no Fibonacci ratio between minute waves a and c.

Redraw the parallel channel about intermediate wave (4) using Elliott’s technique on the daily chart and copy it over to the hourly chart. Expect any downwards movement to find support at the lower edge of this channel.

At 1,370 minor wave C would reach 0.382 the length of minor wave A. If at this point the structure within minor wave C is a complete five then it may end there. If the structure is incomplete about this point, or if price gets there and keeps rising, then the next calculated target is at 1,410 where minor wave C would reach 0.618 the length of minor wave A.

Within minor wave C minute wave ii may not move beyond the start of minute wave i. This wave count is invalidated with movement below 1,305.95.

When minor wave C may be seen as a compete five wave structure then we may expect an end to intermediate wave (4) and a resumption of the downwards trend for gold. At that stage a clear breach of the blue channel containing the zigzag for minor wave (4) would provide trend channel confirmation that the upwards zigzag is over and the next wave is underway. The next wave is most likely to be intermediate wave (5).